Builder confidence in the market for new single-family homes remained at a 22-year low in November as buyers either aren’t able to get financing or a holding out for lower prices, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.
The HMI for November held even with October’s upwardly revised 19 reading — its lowest point since the series began in January 1985 — after falling each month between March and October, according to NAHB. A number over 50 indicates more builders see sales conditions as good than poor.
“Consistent with what builders said in last month’s survey, many are reporting that their special sales incentives are having limited success in terms of getting buyers in the door,” NAHB President Brian Catalde said in a statement.
In November, the index gauging current sales conditions for single-family homes remained flat at 18, while the index gauging sales expectations for the next six months declined a single point to 25. The index gauging traffic of prospective buyers, however, rose two points to 17.
Regionally, the HMI results were mixed, with two regions reporting modest HMI gains and two reporting slight declines. The HMI for the Northeast gained one point to 27, and the HMI for the West gained three points to 18. Meanwhile, the HMI for the Midwest declined one point to 13 and the HMI for the South declined two points to 19.
“The message from today’s report is that builders do not see any significant change in housing market conditions as compared to last month,” NAHB Chief Economist David Seiders said in a statement. “While they continue to work down inventories of unsold homes and reposition themselves for the market’s eventual recovery, they realize it will be some time before market conditions support an upswing in building activity — most likely by the second half of 2008.”